Tests of Profitability - 2008: 97,075,000 = 1.6...

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1. Retrun on Equity (ROE)= Net Income Average Stockholder’s Equity 2008: 97,075 = 1.33 (5,620+140,322)/2 2007: 54,117 = 0.296 (140,322+224,949)/2 2. Return on Assets (ROA) = Net Income + Interest Expense (net of tax) Average Total Assets 2008: (94,075+11,224) = 0.22 (428,066+535,596)/2 2007: (54,117+5,940) = 0.10 (535,596+613,809)/2 3. Financial Leverage Percentage = ROE - ROA 2008: 133%-22% = 111% 2007: 29.6%-10% = 19.6% 4. Earnings per Share (EPS) = Net Income Average Number of Shares of Common Stock Outstanding
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Unformatted text preview: 2008: 97,075,000 = 1.6 (59,879,731+61,574,862)/2 2007: 54,117,000 =0.87 (61,574,862+62,529,513)/2 5. Quality of Income = Cash Flows From Operating Activities Net Income 2008: 168,230 = 1.73 97,075 2007: 95,360 =1.76 54,117 6. Profit Margin = Net Income Net Sales Revenue 2008: 97,075 = 0.08 1,292,254 2007: 54,117 = 0.04 1,383,200 7. Fixed Asset Turnover Ratio = Net Sales Revenue Average Net Fixed Assets 2008: 1,292,254 = 8.9 (121,814+168,292)/2 2007: 1,383,30 = 7.5 (168,292+201,675)/2...
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This note was uploaded on 02/17/2010 for the course ECON ECON taught by Professor Shomali during the Spring '04 term at University of California, Berkeley.

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